Disposable Personal Income: A Good Start to 2026

By SBE Council at 15 March, 2026, 7:39 am

by Raymond J. Keating -

Wrestling with the economic data has been made more difficult because, looking backwards, various reports still haven't caught up due to the government shutdown, and looking forward, we face an onslaught of uncertainty given the war with Iran.

The latest personal income report is still a bit of a laggard, offering data on January 2026, and on matters like inflation as measured by the Personal Consumption Expenditures (PCE) Index, the relevance is diminished by the war and its possible economic fallout.

Nonetheless, PCE Index inflation was hot in its two latest readings, that is, 0.4 percent in December and 0.3 percent in January. Those are troubling reads under any circumstances, but especially before the Iran war.

Good News on Disposable Personal Income

The clear good news in this report, though, was the 0.7 percent increase in real disposable personal income in January, after it meandered for months.

Disposable personal income - that is, personal income less personal current taxes - is the essential personal income gauge as this is the income from which individuals consume, save and invest.

Source: Federal Reserve Bank of St. Louis, FRED

As noted in the above chart, real per capita disposable personal income experienced solid growth post-pandemic, from July 2022 to April 2025. But from April to December of last year, the general direction was stagnation.

The January increase is welcome compared to the previous seven months, and is a positive heading into the Iran war. We'll have to see what happened in February, of course. But the January read is most welcome.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. He is the author of " The Weekly Economist " book series, and 10 Points from Walt Disney on Entrepreneurship .